By C.N. Staff Writer
A recent city audit report found that $1 billion of the of public/private funding in fiscal 2012 intended for local, small- and minority-owned businesses cannot be accounted for. This report comes just weeks after Mayor Gray announced that he was forming a 17-member advisory task force for the city’s Certified Business Enterprise (CBE) program.
In March Gray dismissed Harold Pettigrew, the head of the Department of Small and Local Business Development, which runs the CBE program. The report stated that only 25 of 247 development projects met expenditure goals and filed reports for fiscal 2012. The report showed that of a CBE expenditure goal for $1.4 billion last year, only $33.5 million could be accounted for as having met or exceeded individual project goals.
The report raises questions about firms that are members of the mayor’s task force. According to a Washington Times article, “nearly a third [of the Mayor’s] appointees to a 17-member task force charged with recommending [CBE] reforms come from companies found by the D.C. Auditor to be involved with projects that failed to file required expenditure reports or meet CBE goals last year.”
In late April At-Large Councilmember Vincent Orange, who chairs the Committee on Business, Consumer and Regulatory Affairs called on Gray to disband the task force. Orange has been a driving force behind CBE reform and on April 9th proposed CBE reform legislation, which passed unanimously through the council, only to get struck down by the mayor later.
Orange’s, “Certified Business Enterprise Compliance Emergency Act of 2013,” would have mandated the executive branch to send notices to developers, who failed to submit CBE reports and/or failed to meet CBE expenditure goals as of September 30, 2012, informing them that they have thirty days to demonstrate compliance or submit a subcontracting plan which attains compliance. The mayor said the act would not work and it failed to become law.
Now, Orange wants to investigate the D.C. audit report to see if any of the mayor’s 17-member board is listed in the report.
Quoted in the Washington Times, Orange said, “The Washington City Paper reported that two unnamed task force members are principals at companies overseeing Anacostia High School’s $62 million renovation, a project tainted by reports of fraud and the subject of a lawsuit to be filed by the city under the Racketeer Influenced and Corrupt Organizations Act.”
According to the Times, the report states that a $763,103 payment to “Hines Interests LP East Region” for the Association of American Medical Colleges Headquarters Project was misreported as a CBE expenditure. Bill Alsup, senior vice president of development at Hines said the association is responsible for filing CBE reports and that it was a clerical error, a $763,103 error. The report lists other inconsistencies like McKissack and McKissack, another company that has a member sit on Gray’s task force. McKissack’s firm failed to require an expenditure report for the E.L. Haynes High School expansion in Northwest, the report states, despite a CBE expenditure goal of more than $3.4 million.
Orange is leading the way with calling of the task force’s dismantling. Let’s see if other council members follow suit.